FAR Part 17 Flashcards
Special Contracting Methods
Part 17
Special Contracting Methods
Part 17 - Special Contracting Methods
Overview of Part 17
Purpose: Provides various contracting methods to enhance flexibility and efficiency in procurement (FAR 17.000).
KeySections:
* 17.1: Multi-Year Contracting (FAR 17.101).
* 17.2: Options (FAR 17.201).
* 17.4: Leader Company Contracting (FAR 17.401).
* 17.5: Interagency Acquisitions (FAR 17.500).
* 17.6: Management and Operating Contracts (FAR 17.600).
* 17.7: Interagency Acquisitions by Nondefense Agencies (FAR 17.700).
Part 17 - Special Contracting Methods
Subpart 17.1 - Multi-Year Contracting
Purpose: Allows agencies to enter into contracts covering multiple
years (FAR 17.101).
Benefits: Reduces administrative costs, promotes stability, allows long-term planning (FAR 17.102).
Part 17 - Special Contracting Methods
Subpart 17.2 - Options
Purpose: Provides agencies with the ability to include options in
contracts (FAR 17.201).
Benefits: Offers flexibility, reduces procurement lead time, allows for contract extensions (FAR 17.202).
Part 17 - Special Contracting Methods
Subpart 17.4 - Leader Company Contracting
Purpose: Allows a designated leader company to contract on behalf of
others (FAR 17.401).
Benefits: Leverages expertise, reduces duplication of effort, enhances efficiency (FAR 17.402).
Part 17 - Special Contracting Methods
Subpart 17.5 - Interagency Acquisitions
Purpose: Facilitates acquisitions between federal agencies (FAR
17.500).
Benefits: Reduces duplication, maximizes resource use, streamlines processes (FAR 17.501).
Part 17 - Special Contracting Methods
Subpart 17.6 - Management and Operating Contracts
Purpose: Provides guidance for contracts focused on managing
government facilities (FAR 17.600).
Benefits: Ensures efficient management, facilitates operational continuity, supports long-term planning (FAR 17.601).
Part 17 - Special Contracting Methods
Subpart 17.7 - Interagency Acquisitions by Nondefense Agencies
Purpose: Guides acquisitions by nondefense agencies on behalf of the
Department of Defense (FAR 17.700).
Benefits: Enhances collaboration, ensures compliance, optimizes resources (FAR 17.701).
Multi-year contracting
A special contracting method to acquire known requirements in quantities and total cost not over planned requirements for multiple years
The total funds ultimately to be obligated may not be available at the time of contract award
Generally limited to 5 years unless otherwise
authorized by statute
May be used in sealed bidding or contracting by negotiation
Use of multi-year contracting is encouraged in order to:
Lower costs
Enhance standardization
Reduce administrative burden in contract administration
Stabilize contractor work forces
Allow substantial continuity of performance and avoid costs
of startup, preproduction testing, readiness, and phaseout
Avoid establishing new quality control procedures each year *
Encourage participation by firms not willing or able to
compete for lesser quantities
Option
A unilateral right in a contract by which, for a specified period of time, the government may elect to purchase additional supplies/services called for ni the contract, or may elect to extend the term of the contract
Unless otherwise approved, the total of basic and option periods shall not exceed five years for services or supplies
This does not apply to IT contracts
Option Not usually appropriate when:
Requirements involve minimum economic quantities
Delivery requirements permit competitive acquisition
An indefinite quantity or requirements contract could be used
Contracts may express options for increased quantities of supplies or services in terms of:
Percentage of specific line items, * Increase in specific line items, or
Additional numbered line items
identified as the option
Contracts may express extensions of the contract term as an amended completion date or as additional time for performance
Options can only be exercised
if funds are available, the contractor is eligible, and It is in the government’s best interest
Leader Company Contracting
Adeveloper or sole producer of a product or
system is designated to be the leader company, to furnish assistance and expertise under an
approved contract to one or more designated
follower companies, so they can become a source of supply
The objectives of leader company contracting are:
To reduce delivery time,
To achieve geographic dispersion of suppliers,
To maximize the use of scarce tooling or special equipment, * To achieve economies in production,
To ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts,
To eliminate problems in the use of proprietary data, and
To facilitate the transition from development to production and to subsequent competitive acquisition of end items or major components
Leader company contracting is only to be used when:
The leader company has the necessary production know-how and can furnish assistance to the followers),
No other source can meet the government’s requirements without the assistance of a leader company,
Leader company assistance is limited to that which is essential to enable followers) to produce items, and
Its use is authorized in accordance with agency procedures.
When leader company contracting is used
the government shall reserve the right to approve
subcontracts between the leader company and the follower company or companies.
The leader company may be the prime contractor, and the
follower company the subcontractor, or both the leader and follower companies may be awarded prime contracts.
Interagency Acquisitions
Assisted acquisition
Involves a written agreement
between the agencies to terms and conditions
Requestingagencyprovides unique terms and conditions
or agency-specific requirements, or informs the receiving agency in writing if there are none
Interagency Acquisitions
Direct acquisition
Requesting agency administers the order
No written agreement with the servicing agency is required
Management and operating contract
An agreement under which the government contracts for the operation, maintenance, or support of a government-owned or controlled research, development, special production, or testing establishment
Government-owned or controlled facilities must be utilized; for instance, * In the interest of national defense or mobilization readiness;
* To perform the agency’s mission adequately; or
* Because private enterprise is unable or unwilling to use its own facilities for the work.
The government must maintain a special, close relationship with the contractor and the contractor’s personnel in various important areas such as safety, security, cost control, or site conditions.
The conduct of the work is wholly or at least substantially separate from the contractor’s other business, or the work is closely related to the agency’s mission and is of a long-term or continuing need
Management and operating contracts involve high levels of expertise, continuity of operations and personnel. Because of this, the government is often limited in its ability to effect competition or to replace a contractor.
Multiyear contracting is a special contracting method to acquire
known requirements in quantities and total cost not over planned requirements for up to five years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award.
This method may be used in sealed bidding or contracting by negotiation.
Using multiyear contracting is encouraged to take advantage of one or more of the following:
lower costs;
enhancing standardization;
reducing administrative burden in placing and administering contracts;
substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses,
and phase-out costs;
stabilizing contractor work forces;
avoiding the need for establishing quality control techniques and procedures for a new contractor each year;
broadening the competitive base with opportunity for participation by firms not otherwise willing or able to competelesser quantities, particularly in cases involving high startup costs; and providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology.
Inclusion of options is normally not in the government’s interest when foreseeable require-ments
involve
minimum economic quantities;
delivery requirements are far enough into the future to permit competitive acquisition, production,
and delivery; or an indefinite quantity or requirements contract would be more appropriate than a contract with
Leader company contracting is an extraordinary acquisition technique that is limited to special circumstances and used only when in accordance with agency procedures. A developer or sole producer of a product or system is designated under this acquisition technique to be the leader company, and to furnish assistance and know-how under an approved contract to one or more designated follower companies, so they can become a source of supply. The objectives of this technique are one or more of the following:
Reduce delivery time;
Achieve geographic dispersion of suppliers;
Maximize the use of scarce tooling or special equipment;
Achieve economies in production;
Ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts;
Eliminate problems in the use of proprietary data that cannot be resolved by more satisfactory solutions; or
Facilitate the transition from development to production and to subsequent competitive acquisition of end items or major
Leader company contracting is to be used only when:
- The leader company has the necessary production know-how and is able to furnish required assistance to the follower (s);
- No other source can meet the government’s requirements without the assis-tance of a leader company,
- The assistance required of the leader company is limited to that which is essential to enable the follower(s) to produce the items; and
- Its use is authorized in accordance with agency procedures.
When leader company contracting is used, the government shall reserve the right to approve subcontracts between the leader company and the follower(s).
D. INTERAGENCY ACQUISITION (FAR
17.5)
Interagency acquisitions are commonly conducted through
indefinite-delivery contracts, such as task-and-delivery-order contracts.
The indefinite-delivery contracts used most frequently to support interagency acquisitions are Federal Supply Schedule (FSS) contracts, governmentwide acquisition contracts (GWACs), and multiagency contracts (MACs).
An agency shall not use an interagency acquisition to circumvent conditions and limitations imposed on the use of funds
